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Although lending under the scheme began after agreements were signed with banks around September 10, only about Tk450 crore had been disbursed during the first two weeks.
The issue was discussed at a meeting on Thursday between a Bangladesh Bank deputy governor and managing directors of 36 banks and five financial institutions. City Bank Managing Director Masrur Arefin disclosed the details to reporters after the meeting.
“The Tk5,000-crore scheme is very important for small businesses at the grassroots level. Small traders facing working capital shortages to purchase goods for their daily operations will be able to obtain loans at relatively affordable interest rates under the scheme,” Arefin said.
He said banks had been urged to speed up disbursement, with a target of distributing the full Tk5,000 crore by November.
The meeting also discussed Bangladesh Bank’s ‘Udyog’ project for young entrepreneurs. Arefin said the project is being piloted in selected districts in several divisions but has not received the expected response.
Banks have therefore been instructed to conduct wider promotional campaigns about the project at the upazila, union and district levels, he said.
Under the Udyog project, young entrepreneurs can receive support of up to Tk10 lakh, along with another Tk10 lakh in loans. The initiative particularly targets entrepreneurs aged 21 or below, Arefin said.
Asked about allegations that banks were not cooperating with a Tk60,000-crore package aimed at reopening closed and partially closed industrial units, Arefin disagreed.
He said banks and Bangladesh Bank were interested in providing fresh financing to factories that are closed, partially closed or operating below capacity.
“However, we also have to ensure that fresh non-performing loans are not created after financing,” he said.
“Money cannot be disbursed simply to meet targets. Financing must go to meaningful and sustainable projects. Although finding suitable projects is somewhat difficult at present, banks are making efforts in this regard,” Arefin added.
He said banks and Bangladesh Bank had jointly arranged the financing and the main objective was to ensure that the funds reached genuine entrepreneurs and those who actually need them.